Property 101: Renters Insurance and Other Costs to Consider When Signing a Lease

With the busy rental season upon us, we’re moving onto the second part of our Property 101 series. After giving you the low-down on what to expect when renting your dwelling (including this handy, printable Apartment Hunting Checklist), we’re jumping feet first into the serious stuff: the finances. Notably… pause for dramatic affect… insurance.

What? says you. Insurance when you don’t own your place?
Yes, says us.

Renters insurance is very important considering the landlord’s building insurance won’t be covering your butt should your unit get broken into by a bunch of hoodlums leaving you possessionless and sad (and hopefully unharmed!). But thanks to our insurance expert from LA, Mauren Bernstein, A.R.M., we have all the details you need to know to plan cautiously. We also reconnected with Kaylin Goldstein, our real estate expert here in Chicago, to inform and prepare you for all of the expenses you can expect to incur when moving and signing a new lease on a rental property. Take note of the money you should and shouldn’t expect to get back when the lease is up.

Renter’s Insurance

What is it and what does it cover?
The short answer: Renters insurance helps you in a number of ways. Namely it protects the loss of value should your belongings get stolen or damaged in the rental unit. It also helps save on legal expenses in the case of a law suit from someone who gets injured while in your home.

The longer answer: “Basic Form” renters insurance typically covers fire, vandalism, and malicious mischief, as well as wind, hail, aircraft, riot and civil commotion, vehicles, electrical, and smoke. A “Special Form” policy will include theft, water damage, the weight of ice and snow, as well as everything under the basic form policy. You also want to make sure that you have Replacement Cost coverage, so you can replace your contents with new items and not have your furniture or clothing depreciated for prior use. Depending on where you live, wind and earthquake coverage may be automatically excluded so be sure to ask your agent about what is covered if you live in an area that regularly sees natural disasters.

How much does it cost?
Pricing varies greatly by insurer and the value of your belongings, but for the most part, you can expect to pay between $8-20/month.

Many insurers offer a multi-policy discount, so it’s often wise to cover your car and renters policy with the same insurer.

How do you get it?
There are two ways of getting insurance: 1. calling around or checking the websites of insurers and getting the quotes yourself or 2. hiring a broker to do it for you. If you choose the latter, the best way of finding an agent to work with is through word of mouth. So ask your friends, parents, co-workers, or apartment leasing agent for a recommendation.

The Costs that Come with Signing a Lease

The average application fee when signing a new lease is a $40-$90 non-refundable amount paid up front once you decide on a place to live. This amount is paid without even guaranteeing you the space. What it does is it allows the new landlord or management company to run a credit check, ensure landlord verification (verified you paid rent on time and were overall a good tenant), income/employment verification (they’ll ask for W2, past bank statements, and/or job offer letter), background check, and in some cases eviction check. It is a good idea to give your boss/HR contact and previous landlord a call to let them know you are applying for a new apartment and someone may be contacting them to verify.

When signing a new lease, most of the time you’ll be expected to pay a security deposit. This is typically one month’s rent paid up front in addition to the first month’s rent, which is also due at the time you sign. This amount is almost always refundable but can be used by the landlord  to repair damages caused by you during your lease (can include something as small as patching over holes in the wall from hanging photos–check your lease for details!). It primarily protects the landlord should the tenant disappear without paying rent by giving them leeway and time to find a new tenant.

Generally a cosigner is used when an applicant does not qualify for a lease on their own. This could be because of bad credit or they do not meet the income requirements to afford the rent. Landlords are usually looking for credit scores of 700+ and income of 3 times the monthly rent or more. (Ex. If you are looking to rent a $2000/mo rental you and/or all lessees should make a combined income of $6,000/mo or more. )

Pet deposit usually $500 minimum or ½ month extra deposit – you should typically avoid pet rent (additional fee you pay per month to have a pet in the building) as it’s almost always non-refundable.

Some places–notably high rises and larger buildings–have move-in fees. This price can vary anywhere from $50-300 (or more!) and is non-refundable, one-time fee. Find out if your building has this before you sign anything, and if it does, budget accordingly.

Be sure to check if your building has assessments for common areas and amenities. Things like a gym or pool might have additional fees for use.

If you’re in a position where you need to hire movers, we recommend getting quotes from at least three moving companies. Movers typically charge an hourly rate with a minimum number of hours for hire. Meaning they might charge $70/hr with a minimum of three hours work. Also be sure to ask friends, family, and co-workers for recommendations, as well as checking review sites like You should also tip the movers in addition to the amount you are charged.

And even more costs to keep in mind…

Keep in mind other unexpected costs: whether you have to purchase and install window air conditioning units, blinds, or additional storage wardrobes or shelves. Check what laundry costs, if anything, and be sure to budget that into your monthly expenses. Read the lease to see if there are any fines that can be incurred–know the building’s rules and regs (ie: walking a dog through the front door in some buildings can be a $50 fine). Moving is not cheap, so be thoughtful when on the hunt!


Thank you to our contributing insurance and real estate experts:
Maureen Bernstein, A.R.M. is a Vice President with Kaercher Campbell & Associates, in Los Angeles, CA. Kaercher Campbell & Associates is an independent broker & agent that works with many insurers and licensed to do business in all 50 states.

Kaylin Goldstein of At Properties specializes in residential sales and luxury leasing with a focus on buyer representation, investment, and short sales/foreclosures in Chicago and the surrounding areas.

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